Ottawa orders cellphone providers to cut prices by 25%

Thestar.com
March 6, 2020
Alex Boutilier

The Liberal government is giving Canada’s big three telecommunications companies two years to slash the price of select cellphone plans by 25 per cent.

Industry Minister Navdeep Bains announced Thursday that Rogers, Telus and Bell will have until 2022 to cut prices from benchmark rates that the government has based on the current costs of mid-range plans -- $50 for two gigabyte plans, $55 for four gigabyte plans, and $60 for six gigabyte plans.

If the telecoms refuse or fail to reduce those costs by 2022, Bains said the government will take further action to reduce prices. That could include changing the rules for wireless spectrum auctions and allowing cheaper “mobile virtual network operators” into Canada’s wireless market.

“We’ll look at all regulatory options … and other tools that promote competition, because we know that more competition means more innovation, means more investment,” Bains said in an interview with the Star on Thursday.

According to figures released Thursday, the government’s initiative would result in savings of up to $720 a year for a family of four.

The initiative to bring down cellphone bills was part of Prime Minister Justin Trudeau’s 2019 election platform.

However, the executive director of advocacy group Open Media noted that rates for wireless plans have already been falling thanks to technological advances.

“So I guess the question for me is, have they already been coming down by 25 per cent from two years ago,” Laura Tribe said. “And if so, are (the government’s targets) actually aggressive enough, or is that actually just on trend for where (prices) will be in two years regardless?”

The government is also committing to release quarterly reports on the wireless plan pricing to “increase transparency.”

Bell Canada said the company would “study the government’s direction” but suggested the policy would discourage investment and potentially “put jobs and innovation at risk.”

“It’s the worst time to jeopardize our country’s wireless success as carriers look to ramp up investment for the global move to 5G wireless,” Bell spokesperson Jacqueline Michelis told the Star in a written statement.

“We operate in a highly competitive market that continues to deliver more affordability and value, and we always evolve our services to meet the needs of Canadians,” Rogers spokesperson Sarah Schmidt said in a written statement.

Telus did not respond to a request for comment.